French utility acquiring one of United Kingdom’s largest electricity distribution networks. Deal subject to regulatory approval with completion expected mid-2026. Engie says transaction in line with company’s broader electricity network infrastructure ambitions.
Engie is acquiring UK Power Networks for GBP 10.5 billion ($14 billion) in a deal that will see the French utility take over a distribution network operator serving nearly 8.5 million customers in England. Hong Kong investment group and current owner CKI has entered into a sale and purchase agreement with the multinational, subject to regulatory approval.
UK Power Networks delivers 71 TWh of electricity each year and holds three distribution licenses covering London, East of England and the South East. The deal sees Engie acquire a network of around 192,000 km, three-quarters of which is underground. Engie is also acquiring a company with a strong record of operational performance, as measured by industry regulator Ofgem.
The acquisition comes as distribution networks in the United Kingdom face challenges common to grid operators throughout mature renewables markets. UK electricity demand is expected to at least double by 2050, and network expansion is critical. In addition to investing in physical infrastructure UK Power Networks has also played a role in developing flexibiltiy services for Great Britain’s grid, with activities including trialing an AI supported day-ahead flexibility market for electric vehicles, heat pumps and batteries.
UK Power Networks CEO Basil Scarsella said that joining Engie means the distribution network will “continue to be part of a global energy leader with” with financial strength, as it embarks on a period of significant investment on the network.
“It will reinforce our ability to serve our 8.5 million customers with the highest standards of safety, customer service, and reliability.”
Engie CEO Catherine MacGregor said acquiring UK Power Networks was a “decisive step” in strengthening the company’s position. “It is fully aligned with our ambition to become a key player in regulated electricity network infrastructures, which are essential for energy security, demand electrification and greater system flexibility,” MacGregor said.
Electricity distribution is a regulated industry in the United Kingdom. The revenues and returns that network operators can earn on their infrastructure are determined by Ofgem. UK Power Networks had a regulated asset value (RAV) of GBP 9.2 billion at the end of March 2025 – representing the regulatory value of assets such as power lines and substations on which the company is permitted to earn a regulated return. The RAV is expected to increase to GBP 10.5 billion by March 2028.
Engie plans to finance the acquisition through a mix of debt and hybrid issuance for around €5 billion, plus a disposal program of €4 billion by 2028. The French utility intends to raise up to €3 billion equity through accelerated book building. Engie claims the acquisition and expected asset sales over the year should result in a €17 billion to €19 billion of the group’s capital at the end of 2026. The transaction is expected to result in an increase in net financial debt between €13 billion and €15 billion by the end of 2026.
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